Cement Industry: Semen Indonesia Acquires Holcim Indonesia
Semen Indonesia, the country's largest cement manufacturer, announced that it has signed a conditional sales & purchase agreement with LafargeHolcim Ltd to acquire a 80.6 percent stake in Holcim Indonesia, the third-biggest cement manufacturer in Indonesia. This USD $917 million deal not only rocks Indonesia's cement industry, but also makes Semen Indonesia's role in the domestic cement industry even more dominant, while also turning the company into one of the world's largest cement manufacturers.
Hendi Prio Santoso, President Director of Semen Indonesia, says the deal turns the company into the biggest cement producer in the Southeast Asian region but also cements Semen Indonesia's leading role at home.
In full-year 2017 Semen Indonesia controlled 40.8 percent of the domestic cement market, a much bigger share compared to its main rival Indocement Tunggal Prakarsa (which had a 25.2 percent market share last year). Meanwhile, Holcim Indonesia (which is set to be acquired by Semen Indonesia) controlled a 14.6 percent market share in 2017. The acquisition will therefore push Semen Indonesia's market share to above 50 percent.
Moreover, the acquisition will boost Semen Indonesia's cement production capacity to 53 million tons per ton, thus turning the company into one of the world's ten biggest cement producers.
On Wednesday (14/11) shares of Semen Indonesia, listed on the Indonesia Stock Exchange, rose 9.29 percent to IDR 10,000 per share. Shares of Holcim Indonesia were up 0.25 percent to IDR 1,990 per share.
Stock Quote Semen Indonesia - SMGR:
Stock Quote Holcim Indonesia - SMCB:
The text above is a small part of the article that is included in the November 2018 edition of our research report. This article discusses:
(1) the details of the Holcim Indonesia acquisition;
(2) how Indonesia's cement industry changes after the acquisition
(3) reactions from stakeholders in Indonesia's cement industry;
(4) an update on the cement industry of Indonesia.
Read the full article in the November 2018 edition of our monthly research report (scheduled to be released in early December 2018). You can purchase this report by sending an email to info@indonesia-investments.com or a WhatsApp (WA) message to the following number: +6287884106944
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